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PROFIT AND LOSS ACCOUNT

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Offices closed in Glasgow, Leeds and Northampton ... Pre-let 51,000 sq.ft. distribution warehouse to McFarlanes pre sold to Royal Liver ... – PowerPoint PPT presentation

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Title: PROFIT AND LOSS ACCOUNT


1
www.redrow.co.uk
2
GROUP OBJECTIVE
  • To deliver long term sustainable growth and by
    so doing deliver value to our Shareholders

3
SHAREHOLDER VALUEEARNINGS PER SHARE (p)
  • Basic EPS increased by 33.7 in 2001 / 02
  • Annual compound growth rate in EPS of 30 over
    last five years

4
SHAREHOLDER VALUEDIVIDEND PER SHARE (p)
  • Dividend increased by 10.2 in 2001 / 02
  • Annual compound growth rate in dividend per share
    of 11 over last five years

5
RETURN ON CAPITAL EMPLOYED
  • ROCE at 30 in 2001 / 02
  • ROCE of 28 over the last five years

6
OPERATING PROFITS (m)
  • Operating profits increased by 23.8 in 2001 / 02
    (before charging 4.3m for Tay Homes integration)
  • Annual compound growth rate in operating profits
    of 22.7 over last five years

7
HOUSEBUILDING MARGINS
  • Operating margins in housebuilding at 17.6 in
    2001 / 02
  • Sustainable levels based on current land bank and
    markets

8
CASH FLOW
  • Reduction in net debt of 19.1m in 2001 / 02
  • after increasing owned land bank to 13,400 plots
  • after acquiring Tay Homes for 30.6m
  • Since December 2000, borrowings have reduced by
    nearly 40m
  • Since June 1997, operating profits increased 2.7x
    whilst cash flow has been positive after
    adjusting for share buyback

9
FINANCIAL RESULTS
  • Include Tay Homes from 9 January 2002
  • Include effects of FRS 19 (deferred tax) both in
    current year and comparatives
  • FRS 17 (pensions) transitional rules applied
  • net pension deficit after tax credit 1.6m at
    30 June 2002
  • market value of assets 26.6m
  • defined benefit scheme closed 1 October 2001 to
    new members (ex. existing employees under 21 and
    new employees as determined by Redrow plc)

10
TAY HOMES ACQUISITION
  • Acquisition 9 January 2002
  • Summary

11
TAY HOMES ACQUISITION
  • Land Bank
  • 1,400 plots acquired with planning
  • fair value 19,700 per plot
  • 17 of average selling price
  • 200 plots under contract 150 subsequently
    acquired
  • 300 plots of forward land
  • Additional land opportunities in negotiation

12
TAY HOMES ACQUISITION
Post acquisition trading
13
TAY HOMES ACQUISITION
14
TURNOVER ANALYSIS
  • Homes includes 36.2m relating to Tay Homes in
    2002
  • Homes increase excluding Tay Homes is 22

15
PROFIT ANALYSIS
  • Homes includes 5.8m relating to Tay Homes in
    2002
  • Homes increase excluding Tay Homes is 20

16
PROFIT ANALYSIS - 2002
17
PROFIT ANALYSIS
18
CAPITAL EMPLOYED
19
STOCKS
20
RETURN ON CAPITAL EMPLOYED
21
CASH INFLOW FROM OPERATIONS
22
CASH FLOW
23
NET ASSETS
24
BANKING FACILITIES
  • m
  • Syndicated loan 180
  • Bilateral facilities 70
  • 250
  • Syndicated loan extended
  • 5 years from 9 August 2002
  • increased from 110m to 180m
  • 5 UK based lenders

25
HOMES - TRADING PERFORMANCE
26
HOMES - BRAND PROFILE
27
HOMES - BRAND PROFILE
28
HOMES - REGIONAL PROFILE
29
HOMES - SALES PERFORMANCE
30
HOMES - SALES PERFORMANCE
  • In The City schemes reflect only three
    developments on sales release compared to six in
    2001

31
HOMES - SALES PERFORMANCE
  • Tay forward sales included in appropriate brand
    based on specification

32
HOMES - CONSTRUCTION
  • BUILD COSTS
  • Material prices controlled in line with inflation
  • Ongoing trade shortages resulted in cost
    increases of between 5 and 10 for some trades
  • Increasing burden of building regulations and tax
    increases

33
HOMES - CONSTRUCTION
  • STEEL FRAME CONSTRUCTION - FRAMING SOLUTIONS plc
  • 50 JV with Corus combination of skills
  • EC clearance obtained
  • Redrow investment up to 3.0m
  • new production line at Swadlincote mid 2003
  • capability over 4,000 units per annum
  • breakeven at approx. 2,000 units per annum
  • Redrow
  • Focus on Harwood and Design Schemes
  • No material effect on cost base
  • Share of loss in year to June 2003 approx. 0.8m

34
HOMES - LAND BANK ANALYSIS
Forward land contribution to current land bank
1,150 plots (25 of purchases excluding Tay)
35
HOMES FORWARD LAND
  • Peacock Farm, Bracknell
  • Option secured 1995
  • Development cleared by Secretary of State 2002
  • 750 plots for Redrow Homes (Southern) Limited

36
HOMES - LAND WITH PLANNING
The average selling price of the 13,400 plots
with planning at June 2002 is estimated at
140,000 per plot
37
HOMES - LAND WITH PLANNINGBRAND PROFILE
Tay plots at June 2002 have been allocated to the
appropriate brand based on specification
38
HOMES - LAND WITH PLANNINGREGIONAL PROFILE
39
COMMERCIAL DIVISION
  • FOCUS
  • mixed use developments
  • project management skills harnessed to assist on
    In The City schemes

40
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44
CURRENT TRADING SALES MARKET
  • Reservations up just over 10 in first 9 weeks of
    new financial year
  • Over 50 of new financial year completions
    secured
  • Increases in sales prices still being achieved in
    all regions

45
CURRENT TRADING - LAND MARKET
  • Good level of land buying opportunities
  • Planning system remains an obstacle to bringing
    sites on stream
  • Land requirements controlled as follows
  • Current year - 100
  • 2003 / 04 - 95
  • 2004 / 05 - 80

46
OUTLOOK
  • Planning policies continue to restrict supply
  • Demographics support production in excess of
    current levels
  • Existing housing stock deteriorating in quality
  • Cost of borrowing likely to remain at low levels
  • Mortgage market remains competitive
  • TRADING FUNDAMENTALS REMAIN SOUND

47
SUMMARY
  • Successful integration of Tay Homes
  • Current position
  • record forward sales in Homes
  • effective low cost land bank in Homes
  • established development programme in Commercial
  • Focus remains
  • consistently high ROCE
  • sector leading operating margins
  • sustainable and profitable growth
  • ENHANCED SHAREHOLDER VALUE

48
www.redrow.co.uk
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